State Farm Mutual Automobile Insurance v. Vollrath , 132 F. App'x 414 ( 2005 )

Opinions of the United
2005 Decisions States Court of Appeals
for the Third Circuit
5-26-2005
State Farm Mutl Auto v. Vollrath
Precedential or Non-Precedential: Non-Precedential
Docket No. 04-2937
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2005
Recommended Citation
"State Farm Mutl Auto v. Vollrath" (2005). 2005 Decisions. Paper 1126.
http://digitalcommons.law.villanova.edu/thirdcircuit_2005/1126
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2005 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 04-2937
____________
STATE FARM MUTUAL
AUTOMOBILE INSURANCE COMPANY
v.
P. DANIEL VOLLRATH, Individually and as
Executor of the Estate of Virginia Vollrath, Deceased
MOUNTAIN LAUREL ASSURANCE (Intervenor in D.C.)
Mountain Laurel Assurance,
Appellant
____________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 02-cv-01257)
District Judge: Honorable Legrome D. Davis
____________
Submitted Under Third Circuit LAR 34.1(a)
May 12, 2005
Before: SLOVITER, FISHER and ALDISERT, Circuit Judges.
(Filed: May 26, 2005)
____________
OPINION OF THE COURT
____________
FISHER, Circuit Judge.
Appellant Mountain Laurel Assurance Company (“Mountain Laurel”) appeals
from the District Court’s judgment in favor of State Farm Mutual Automobile Insurance
Company (“State Farm”) in an action filed by State Farm against P. Daniel Vollrath
seeking a declaratory judgment that Mr. Vollrath was only entitled to uninsured or
underinsured motorist coverage (“UM/UIM coverage”) in the amount of $15,000 per
person and $30,000 per accident under his State Farm-issued automobile policy
(“Policy”). Mountain Laurel, the insurance carrier for Mr. Vollrath’s motor home,
provides UM/UIM coverage to Mr. Vollrath on an excess basis, after State Farm’s
UM/UIM limits are exhausted, and due to its potential obligation, participated in the trial
below as a defendant-intervenor. Mountain Laurel is the sole appellant in this matter.
We affirm the District Court’s judgment in favor of State Farm.
I. Standard of Review and Governing Law
This Court exercises plenary review over the District Court’s prediction of
Pennsylvania law. Nationwide Mut. Ins. Co. v. Buffetta, 230 F.3d 634, 637 (3d Cir. 2000)
(citing Companie des Bauxites de Guinee v. Ins. Co. of N. Am., 724 F.2d 369, 371-72 (3d
Cir. 1983)). “In predicting how the highest court of the state would resolve the issue, we
must consider ‘relevant state precedents, analogous decisions, considered dicta, scholarly
works, and any other reliable data tending convincingly to show how the highest court in
the state would decide the issue at hand.’” Id. (quoting McKenna v. Ortho Pharm. Corp.,
2
622 F.2d 657, 663 (3d Cir. 1980)). We also review the District Court’s factual findings
for clear error. Tudor Dev. Group, Inc. v. United States Fid. & Guar. Co., 968 F.2d 357,
359 (3d Cir. 1992).
Under Pennsylvania’s Motor Vehicle Financial Responsibility Law (“MVFRL”),
insurance companies must provide UM/UIM coverage in amounts equal to bodily injury
liability coverage except where the named insured requests in writing coverage in
amounts less than the limits of liability for bodily injury. See 75 P A. C ONS. S TAT. A NN.
§§ 1731 and 1734 (1996) (effective Oct. 1, 1984). To that end, the MVFRL provides that
“[i]t shall be presumed that the insured has been advised of the benefits and limits
available under this chapter provided the following notice . . . is given to the applicant at
the time of application for original coverage or at the time of the first renewal after
October 1, 1984 . . . .” 75 P A. C ONS. S TAT. A NN. § 1791 (1996) (effective Oct. 1, 1984).
Section 1791 additionally provides the precise language to be included in this notice:
Insurance companies operating in the Commonwealth of Pennsylvania are
required by law to make available for purchase the following benefits for
you, your spouse or other relatives or minors in your custody or in the
custody of your relatives, residing in your household, occupants of your
motor vehicle or persons struck by your motor vehicle:
....
(6) Uninsured, underinsured and bodily injury coverage up to at least
$100,000 because of injury to one person in any one accident and up to at
least $300,000 because of injury to two or more persons in any one accident
. . . . [A]n insured may elect to purchase lower benefit levels than those
enumerated above. Your signature on this notice or your payment of any
renewal premiums evidences your actual knowledge and understanding of
3
the availability of these benefits and limits as well as the benefits and limits
you have selected.
Id.
Thus, in order to show that an insured validly reduced UM/UIM benefits, an
insurance company must show that: (i) the insured had notice of his rights under the
MVFRL; and (ii) the insured voluntarily requested in writing that the limits of his
UM/UIM coverage be lowered. Jiongo v. Nationwide Ins. Co., 1998 WL 381706, at *6
(E.D. Pa. July 8, 1998), aff’d, 203 F.3d 817 (3d Cir. 1999); Dang v. State Farm Mut.
Auto. Ins. Co., 1996 WL 421942, * at 3 (E.D. Pa. July 19, 1996), aff’d, 111 F.3d 126 (3d
Cir. 1997); see also Nationwide Ins. Co. v. Resseguie, 980 F.2d 226, 232-33 (3d Cir.
1992) (finding actual knowledge of rights under MVFRL insufficient without written
waiver). Notice is presumptively established where the insured signs the notice provided
by the insurer pursuant to § 1791. See Shipe v. Allstate Ins. Co., 791 F. Supp. 109, 111
(M.D. Pa. 1992) (“An insurer’s signature on the notice establishes a conclusive
presumption that he has actual knowledge of the coverage available to him under the
MVFRL.”); Prudential Prop. & Cas. Ins. Co. v. Pendleton, 858 F.2d 930, 936 (3d Cir.
1988) (“[W]e find the presumption of waiver to be a conclusive presumption once it is
proven that the insured voluntarily signed the waiver.”). In the absence of a signed
notice, the insurer bears the burden of proving that the insured knowingly and
intelligently waived in writing the coverage available under the MVFRL. Shipe, 791 F.
Supp. at 111.
4
II. Discussion
The factual background of this action, which is lengthy and complicated, was
thoroughly discussed by the District Court and is known to the parties. Accordingly, we
will focus in this opinion on the rationale for our decision.
The sole issue in this case is whether Mr. Vollrath validly waived his right to
UM/UIM coverage equal to his bodily injury coverage. The District Court concluded that
Mr. Vollrath validly waived this statutory right, because he had notice as to the limits and
coverage available to him and he requested in writing that his UM/UIM coverage be
lowered. This Court agrees.
First, Mr. Vollrath received notice of his rights relating to coverage and limits
under the MVFRL. In December 1984, State Farm mailed a “Premium Notice” to Mr.
Vollrath, which noted the change in law requiring it to make available UM/UIM coverage
in amounts equal to bodily injury coverage and Mr. Vollrath’s option to purchase lower
coverage consistent with his previous limits of $15,000 per person and $30,000 per
accident. In addition, the Premium Notice included an insert, which contained the
“Important Notice” required under § 1791, and an explanatory booklet advising Mr.
Vollrath of his rights to have UM/UIM limits equal to his bodily injury limits under the
MVFRL. Mr. Vollrath denies receiving these materials, however, the District Court
found his testimony “unpersuasive and unconvincing.” Moreover, State Farm need not
produce the actual signed § 1791 form to prove that one was sent to Mr. Vollrath, but
5
must only show that it has a general procedure for mailings and that he would have been
on the mailing list for such forms. Clifford v. Prudential Prop. & Cas. Ins. Co., 2001 WL
1076582, at *4 (M.D. Pa. Aug. 28, 2001). The District Court found State Farm’s
testimony regarding its mailing procedures in place in 1984, which ensured that its
Pennsylvania policy holders received this mailing, to be “persuasive and compelling.”
Accordingly, because compliance with § 1791 establishes a conclusive presumption that
the insured had actual notice of the coverage available to him under the MVFRL, the
notice requirement for waiver of the higher UM/UIM benefits is satisfied.
Mr. Vollrath also requested in writing lower coverage limits of $15,000 per person
and $30,000 per accident, satisfying the second requirement of a valid waiver. First, Mr.
Vollrath continued to pay his premiums by check on a semi-annual basis from February 7,
1985 until January 3, 2002, in an amount consistent with the $15,000 per person and
$30,000 per accident coverage level. See Buffetta, 230 F.3d at 639-41 (concluding that
payment of lower premium amounts every six months for three years before accident
demonstrated knowledge and acquiescence in selection of lower coverage); State Farm
Mut. Auto. Ins. Co. v. Gillespie, 342 F. Supp. 2d 317, 322-23 (E.D. Pa. 2004) (finding
payment of reduced premiums for nearly sixteen years sufficient to show he “elect[ed] in
writing the lower limits of UIM coverage”). Additionally, Mr. Vollrath signed a “Notice
to Named Insureds” on June 8, 1990, stating that he “wanted to retain [his] current
stacking underinsured Motor Vehicle Coverage W with limits of $15,000/$30,000 at a
6
premium of $13.” See Breuninger v. Pennland Ins. Co., 675 A.2d 353, 357 (Pa. Super.
Ct. 1996) (finding coverage selection form signed by insured sufficient to satisfy writing
requirement).
Because Mr. Vollrath received notice of his rights under the MVFRL and elected
for lower coverage levels in writing, this Court finds that he validly waived his right to
UM/UIM coverage equal to his bodily injury coverage. For these reasons, we will affirm
the District Court’s judgment in favor of State Farm.
7